KRNY

Kearny Financial ($KRNY) Director Accumulates 15K Shares in Year with August Buying Spree... P/B 0.51 Undervaluation Meets 7.4% Dividend Yield

08/12/2025 06:00

Kearny Financial ($KRNY) Director Melvina Wong-Zaza has been making consecutive stock purchases in August, drawing market attention. She bought 1,500 shares at $5.99 on August 1st, followed by another 1,375 shares at $5.93 on August 8th. This represents confident consecutive investing rather than a one-time transaction. Kearny Financial is a New Jersey-based regional bank holding company established in 1884, primarily engaged in deposit gathering and lending through its subsidiary Kearny Bank. Core business areas include multifamily and commercial real estate loans, residential mortgages, and related banking services. With a market cap of approximately $389 million, this small-cap company is closely tied to the regional economy. Wong-Zaza's recent purchases are particularly noteworthy given her consistent buying pattern over the past year. She purchased 6,000 shares at $7.13 on July 31, 2024, 1,600 shares at $6.21 on August 15, 2024, and 5,000 shares at $7.23 on February 7, 2025, before her recent consecutive purchases. Total acquisition amounts to 15,475 shares worth approximately $104,000. She has consistently identified buying opportunities during price declines. Conversely, executive sales also occurred. EVP Thomas DeMedici sold 6,304 shares at $6.01 in August 2024, while EVP Patrick Joyce sold 4,000 shares at $6.13 in June 2025. However, Joyce's transaction involved restricted stock units (RSUs) vesting at 33% annually over three years starting from 2023. $KRNY currently trades at $5.86, down approximately 13% year-to-date. After peaking at $8.21 in November 2024, the stock has undergone sustained correction. Broader regional banking sector challenges and interest rate uncertainties appear to be weighing on the share price. Despite this, financial improvements are evident. Fiscal 2025 net income reached $26.1 million, marking a turnaround from prior year losses. TTM revenue of $151.6 million shows quarterly YoY growth of 8.1%. Operating margin remains healthy at 24.46%. Particularly notable is the current valuation. With a price-to-book ratio of 0.51, the stock trades at half its book value, suggesting significant undervaluation. Forward P/E of 11.49x is substantially lower than historical ranges of 22-24x. The one-year price target of $7.25 implies approximately 24% upside potential from current levels. The dividend aspect is also attractive. Quarterly dividends of $0.11 continue, yielding 7.4% annually. The next ex-dividend date is August 12th, with payment scheduled for August 26th. However, the payout ratio exceeding 100% requires monitoring for sustainability concerns. Risk factors exist as well. Total debt of $1.26 billion versus cash of $167 million indicates high leverage. ROE of 3.48% and ROA of 0.34% lag industry averages in capital efficiency. Recent quarterly results have consistently missed analyst expectations. However, institutional ownership of 65% and Piper Sandler's January 2025 upgrade to 'overweight' with a $9 price target are positive factors. The conservative balance sheet and sustainable dividend have positioned it as a potential acquisition candidate. Key upcoming catalysts include next quarter's earnings release, dividend policy updates, and debt management strategies. Broader regional banking sector recovery and interest rate stabilization will also be important variables. In conclusion, $KRNY presents an intriguing opportunity with sustained insider buying amid undervaluation. While attractive dividend yield and valuation metrics exist, dividend sustainability and leverage risks require careful consideration.